NEW DELHI: The government, which is infusing Rs 1,894 crore capital into State Bank of India, has asked the country's largest lender to take necessary regulatory approvals for the fund infusion.
This is the part of Rs 7,575 crore capital infusion announced by the government in July last year. As per the announcement, the government released 75 per cent of the amount while the rest was withheld.
"In continuation of decision of July 19, 2016, the government has approved to increase the paid up capital by way of preferential allotment of equity shares," a government notification said.
SBI got approval from shareholders to raise up to Rs 5,681 crore by issuance of preferential shares to the central government, its majority shareholder in December last year.
Government had provided Rs 22,915 crore capital to 13 PSU banks including SBI, PNB and IOB to enhance their lending operations in July, 2016.
"Consequent upon the above exercise, 75 per cent of the amount collected for each bank is being released now to provide liquidity support for lending operations as also to enable banks to raise funds from the market," Finance Ministry in a statement had said.
The remaining amount, to be released later is linked to performance, with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations, it had said